The Association of Independent Professionals and the Self-Employed (IPSE) has released new research highlighting the impact of late payments on UK freelancers and revealed a list of the ten worst companies for late payment in the UK.
Despite government efforts to tackle late payments, the IPSE’s research found that 35 per cent of self-employed workers say they haven’t been paid on time in the last year. 28 per cent said they have had to wait between one and three months after the agreed-upon payment deadline, while 18 per cent say they have had to wait over three months.
The research also found that the average amount freelancers were owed due to late payments has remained relatively stable, but still increased slightly over the past two years, rising to £5,230 this year from £5,140 in 2020.
Amid the worsening cost-of-living crisis, figures showed that 20 per cent of freelancers say that late payments have put them in a situation where they have no money to cover basic expenses like rent and bills. 23 per cent have been forced to use a credit card or overdraft due to late payment, while 21 per cent say they have used up most or all of their savings due to not having been paid on time.
The study also highlighted the mental health impact of late payments, with close to half of freelancers (49 per cent) saying they have felt stressed or anxious due to not being paid on time. 31 per cent felt less productive due to late payment, 28 per cent have lost sleep as a result of worry and 26 per cent have suffered from a lack of confidence.
IPSE Director of Policy Andy Chamberlain said: “Late payments can be threatening to self-employed workers at the best of times. However, at a time when the country is going through an unparalleled squeeze in living standards, the failure to clamp down on late payments is fatal to freelancers and the future of self-employment.”
“While the government has made good progress in tackling late payment in recent years by creating the Small Business Commissioner role and promoting the Prompt Payment Code, more still needs to be done. For instance, the next Prime Minister must go a step beyond the Prompt Payment Code by banning payment terms over 30 days, so that freelancers can be safe in knowing that they won’t have to max out credit cards or dip into their overdraft to get by.”
Alongside the research, the IPSE has revealed its Payment Practices Index – which collates government data to reveal the payment practices of 6,448 large-sized UK companies – and published a list of the ten worst companies for late payments.
Topping the list was Minster Law Ltd, with freelancers engaged by the company waiting on average 469 days for payment, followed by Sutton Maintenance Ltd (395 days) and Canary Wharf Ltd (278 days). Other notable firms in the top ten included Publicis Media Exchange Ltd (278 days), Ernst & Young (Asia-Pacific) Services Ltd (192 days) and Arriva Rail North Ltd (177 days).
